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Economic Effects of the Corporate Alternative Minimum Tax
A monograph published September 1991 by the ACCF Center for Policy Research.
Introduction
The American Council for Capital Formation Center for Policy Research
in 1990 launched a multi-year special project to explore "Tax and
Environmental Policies and U.S. Economic Growth." Three monographs,
each reporting on a day-long symposium, were published as a result of
the first-year effort: Business Taxes, Capital Costs, and Competitiveness;
Environmental Policy and the Cost of Capital; and U.S. Investment Trends:
Impact on Productivity, Competitiveness, and Growth.
A fourth symposium, "Economic Effects of the Corporate Alternative
Minimum Tax," held on May 14, 1991, kicked off the second year of
the Center's special project on tax and environmental policies. This monograph
contains two analyses of the alternative minimum tax (AMT) that were specially
commissioned for the May symposium, along with responses by the tax policy
experts, business representatives, and congressional staffers who participated
as panelists. We are very pleased to include keynote addresses by two
distinguished members of Congress who also contributed their views on
the corporate AMT at the May 14 event: Senator David L. Boren (D-Okla.),
chairman of the Senate Finance Subcommittee on Taxation, and Congressman
Bill Archer (R-Tex.), ranking Republican member of the House Committee
on Ways and Means.
The two analyses presented here-by Stephen Corrick and Gerald Godshaw
of Arthur Andersen & Co., and by Andrew Lyon of the University of
Maryland-provide strong evidence that the corporate alternative minimum
tax is handicapping U.S. business by increasing capital costs and thus
is providing an edge to our foreign competitors. Although the current
political environment does not appear to favor quick relief in the near
term, over the longer term we believe that these Center-sponsored studies
will bolster the case for reform of the corporate AMT.
In addition to extending our sincere thanks to those who participated
in the May symposium and subsequently assisted in the preparation of this
monograph, we express our deep appreciation to the groups whose financial
support has made possible the Center's special project on "Tax and
Environmental Policies and U.S. Economic Growth": Air Products and
Chemicals, Inc.; American Business Conference; American Petroleum Institute;
Baltimore Gas & Electric Company; Cahners Publishing Company; Chemical
Manufacturers Association; Dow Chemical Company; Dresser Foundation, Inc.;
Exxon Company, USA; IBM Corporation; Illinois Power Company; Inland Steel
Company; LTV Steel Company; Manufacturers' Alliance for Productivity and
Innovation; Mitchell Energy Corporation; Monsanto Company; National Venture
Capital Association; Pennsylvania Power and Light Company; Potomac Electric
Power Company; Shell Oil Company; Texaco Foundation; Thermo Electron Corporation;
and Weyerhaeuser Company.
We look forward to sharing additional insights about the relationship
between U.S. tax and environmental policies and economic growth through
our other symposium and publication programs in 1991, as we continue and
broaden our investigation of this important subject.
Charls E. Walker, Chairman
Mark Bloomfield, President
Margo Thorning, Director of Research
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